The Sixth Pay Commission (SPC) has submitted its recommendations on pay revision for over four million Central government and PSU employees. It is still early days for the beneficiaries to decipher from the voluminous report the exact benefit they would get from the salary revisions proposed. For one, the SPC has done away with the prevailing system of packaging emoluments. The basic pay arrangement is proposed to be discontinued in favour of two separate components – a pay band component and a grade pay component. The pay band roughly corresponds to existing pay scales. But there would be far fewer pay bands – 20 to be precise – in place of around 38 scales at present. On the face of it, this would suggest a narrowing down of gap in pay structures at various levels. But it is not so. The proposed elaborate scheme of fitment of the employees in the 20 pay bands will ensure that wide distinctions in terms of prevailing scale pays would continue. 

Another departure is the proposal to discontinue the annual fixed quantum increments. The SPC has recommended a uniform 2.5 per cent increase in the pay band amount with a view to introduce a performance-based higher – 3.5 per cent increment – in the coming years. While it has recommended 3.5 per cent increment to 20 per cent of employees in the Group-A services, it has asked the government to hold consultations on introduction of this system to others as well.

While these recommendations may receive mixed reactions from the beneficiaries, they would certainly be happy with the recommendation envisaging the extension of DA rates to house rent and transport allowances. In effect, the band pay, grade pay, HRA and transport allowance would count while calculating the quantum of DA that the employees get. The SPC has justified this on the ground of insulating these allowances from inflation. Much as it has asked the government to take all the recommendations in toto, it is more likely, as in the past that some recommendations like discontinuing the gazette holidays may not be implemented. It may be a good idea to relax the service norms for pension eligibility, but it is doubtful if this would help improve work efficiency. It is also doubtful if the SPC has arrived at a realistic assessment of the budgetary implications of implementing its recommendations or the fiscal impact of it on Central and State finances. A government that has already put itself on election mode may not be in a mood to address these issues.